Final answer:
Bonanza farms thrived due to economies of scale, capital to invest in technology and infrastructure, and better access to markets through railroad networks. These advantages allowed them to produce at lower costs and on a larger scale than small family farms, which struggled to compete.
Step-by-step explanation:
The success of Bonanza Farms
The success of large, commercial “bonanza farms” can be attributed to various factors, one of which is their ability to benefit from economies of scale. Unlike smaller family-run farms, bonanza farms were large operations owned by speculators who could invest significantly in infrastructure, and machinery, and employ laborers to work the land efficiently. These investments allowed bonanza farms to cultivate large areas of land and produce crops on a scale that drove down the per-unit cost of production, making them highly profitable.
Economies of Scale Benefits
Bonanza farms enjoyed several advantages over their small-scale counterparts. The sheer size of these operations meant they could negotiate better prices for both inputs and outputs. They had the capital to invest in the latest farming technologies, which helped increase their production rates and operating efficiencies further. Additionally, these large farms were well-positioned to take advantage of new transportation networks, particularly the railroads, to ship their products to distant markets, thus expanding their reach and profitability.
Impact on Family Farms
While bonanza farms thrived, they were often detrimental to the small family farms, which struggled without the means to compete on the same scale. These smaller operations could not reduce their costs as dramatically and frequently lacked the necessary capital to invest in technological improvements or to access broader markets, resulting in ongoing economic difficulties for family farmers.